Public Bill Committee

[Mr David Amess in the Chair]

David Amess: Before we begin, I have a few preliminary announcements to make. Members may, if they wish, remove their jackets during meetings; I do not think it is that warm at the moment, but you may get hot as a question develops. Can all Members please ensure that mobile phones are switched off? We do not want any daft Christmas ringtones playing just at the moment. Please also switch off pagers or switch them to silent mode.
As a general rule, my fellow Chairman and I do not intend to call starred amendments which have not been tabled with adequate notice; the Clerk will need adequate notice of such things. The required notice period in Public Bill Committees is three working days; therefore, amendments should be tabled by the rise of the House on Monday for consideration on a Thursday and by the rise of the House on Thursday for consideration on a Tuesday. Please note that the House is now expected to rise at 5.30 pm on Thursdays.
For those members of the Committee less familiar with the process of taking oral evidence in Public Bill Committees—I imagine that is quite a lot of colleagues— it may help if I briefly explain how the Committee is supposed to proceed. It will first be asked to consider the programme motion on the amendment paper, for which debate is limited to half an hour. I doubt whether we necessarily need that, but technically we have half an hour. We will then proceed to a motion to report written evidence and a motion to permit the Committee to deliberate in private in advance of the oral evidence sessions, which I hope can be taken formally. Assuming that the last of those motions is agreed to, the Committee will then move into private session. Once it has deliberated, the witnesses and members of the public will be invited back into the room and our oral evidence session will begin. If the Committee agrees to the programme motion, we will hear oral evidence this morning. I call the Minister to move the programme motion standing in his name.

Stephen Hammond: I beg to move,
That—
(1) the Committee shall (in addition to its first meeting at 8.55 am on Tuesday 4 December) meet—
(a) at 2.00 pm on Tuesday 4 December;
(b) at 11.30 am and 2.00 pm on Thursday 6 December;
(c) at 8.55 am and 2.00 pm on Tuesday 11 December;
(d) at 11.30 am and 2.00 pm on Thursday 13 December;
(2) the Committee shall hear oral evidence on Tuesday 4 December in accordance with the following Table:

Time

Witness
Until no later than 10.00 am
Tandem Transport
Clugston Distribution
ABE (Ledbury)
Until no later than 10.45 am
DHL
Eddie Stobart
Until no later than 2.30 pm
RAC Foundation
John Walker Consultancy
Until no later than 2.50 pm
Carlsberg
Until no later than 3.50 pm
Freight Trade Association
Road Haulage Association Ltd
British Vehicle Rental and Leasing Association
Until no later than 4.30 pm
Department for Transport
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 6; Schedule 1; Clauses 7 to 12; Schedule 2; Clauses 13 to 22; new Clauses; new Schedules; remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 13 December.
Thank you for calling me, Mr Amess. It is very good to see you in the Chair this morning. The programming sub-committee met last Thursday, and agreed the resolution that is before the Committee today. On a point of clarification, I inform the Committee that the representatives from Carlsberg will not be able to attend this afternoon’s session; we will therefore take earlier the evidence of the panel that would have followed the Carlsberg panel.

Question put and agreed to.

Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Stephen Hammond.)

David Amess: Copies of memorandums the Committee receives will be made available in the Committee Room.

Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Stephen Hammond.)

The Committee deliberated in private.

Examination of Witnesses

Vincent Brickley, David Heath and Andy Boyle gave evidence.

Q 1

David Amess: Good morning. We will now hear oral evidence from representatives of Tandem Transport, Clugston Distribution and ABE (Ledbury). I say to our witnesses that such evidence sessions are about three or four years old—we never used to have them before considering Bills. They are supposed to be an opportunity for members of the Committee, who are already greatly enlightened, to become even more enlightened by the answers you give.
This is your opportunity as witnesses to get on the record your views about the measure before us. Gentlemen, I assume you have not done anything like this before. Do enjoy the session. Colleagues are very pleasant, by and large. Will witnesses please briefly introduce themselves with a short statement about this measure?

Vincent Brickley:  I am Vincent Brickley, director and owner of Tandem Transport, a smallish operator in south Wales, running about 25 vehicles. I am quite proactive for the Bill; I think it has some good possibilities. My main concern would be enforcement.

David Heath:  Good morning. I am David Heath, general manager of Clugston Distribution in Scunthorpe. We have a fleet of 80 articulated vehicles running around the country. I am supportive of the Bill, particularly of the low administrative burden and no on-cost to UK logistics companies in terms of tax burden.

Andy Boyle:  Good morning. I am Andy Boyle, chairman and managing director of ABE (Ledbury) in rural Herefordshire. I have also been chairman of the Road Haulage Association. I applaud the moves thus far. Through my long career in trade association business I have listened to all sorts of schemes to charge the foreign operator, and this one appears to be far and away the simplest and most user-friendly.

David Amess: Thank you for that, gentlemen. Can you please try to project your voices so that colleagues can hear what you are saying in your nice Welsh lilt? Otherwise, it is also difficult for the Hansard reporters who are responsible for the record.
Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill, and that we must stick strictly to the timings in the programme order the Committee has agreed. I hope I will not have to interrupt Members or witnesses mid-sentence, but I will do so if necessary. This sitting draws to a close at 10 o’clock or before.

Q 2

Jim Fitzpatrick: It is a pleasure to see you presiding this morning, Mr Amess. I, too, welcome the witnesses and assure them that, as our previous debates have made clear, the Bill has cross-party support so nobody will be asking any trick questions; this is very much evidence gathering. With that in mind, I turn to your comments, Mr Brickley, and the following comment in your written submission:
“Without such a system I fear that VOSA will either get a lot of requests about foreign operators or UK operators will feel they have not paid.”
Could you perhaps elaborate on your views about enforcement? I am sure you have seen our discussions and the questions we have been asking about how it will work. Have you any views on enforcement in addition to those you have articulated?

Vincent Brickley:  I think you need to be very careful about how the system operates. I know we all want to move towards more electronic ways, and if we can have a data tag in the vehicle at point of entry so that it is easier for VOSA to ensure that the vehicles are valid for entry into the country, I think that is very important. Without that, it will be hard for VOSA to justify it. UK operators may be unsure, if a vehicle does not have any sort of visible disc, whether or not a foreign operator has paid. VOSA could end up with a lot of requests, which could create quite a big administrative burden, with people, as responsible operators, reporting foreign vehicles because they think, “There is no disc in their vehicle to say that they have paid.”

Q 3

David Amess: Gentlemen, could you both also respond to Mr Fitzpatrick’s question?

David Heath:  I think most of the enforcement would need to be near the port of entry around the major docks of the UK. It is generally the channel ports where the accompanied vehicles will come in. The further you move up the country towards Birmingham, Hull and upwards, generally the trailers come in unaccompanied without a truck on the front. I would pay a lot of attention to the routes in from southern Ireland, and particularly to how you deal with the Northern Ireland-southern Ireland border situation and a number of roads going across there. You would need to consider how you could enforce that area.

Andy Boyle:  Bearing in mind that the enforcement in Northern Ireland is not exactly the same as the enforcement in the rest of Great Britain, that issue will need addressing. I do not entirely agree with David that the enforcement problem goes away the further away from the ports you get. I would have thought it would be very wise of VOSA to spread its enforcement as widely as possible. Anybody who knows the roads of this country knows where VOSA congregates and knows the rat runs where VOSA does not congregate. That includes people from far, far away from here. I think the wider the enforcement, the better. The revenue raised from this levy supports VOSA as well.

Q 4

Andrew Bridgen: I declare an interest: I am the chairman of a company that operates 14 HGVs. I welcome our expert witnesses. What do you think about the trigger point for the levy being set at vehicles plated over 12 tonnes? Do you think that is the right level? Should it be lower or higher?

Andy Boyle:  It is probably the law of diminishing returns below 12 tonnes. In an ideal world you would catch everybody, but there are relatively few vehicles that come in under 12 tonnes gross, and they are well under 12 tonnes gross. I am always amazed at how many transit/sprinter-sized vehicles come from the far end of Europe over here. Presumably, those are the ones that haven’t got very big fuel tanks and actually pay a bit into the Exchequer by way of fuel duty, because none of the big ones do.

David Heath:  It is very difficult to decide exactly where that limit would be. I, too, have seen a big increase in the number of eastern European large vans coming in and trading in the UK. But if you put the limit at 7.5 tonnes, potentially they would be running below that. In terms of enforcement, 12 tonnes is probably not a bad place to be. Possibly we would have gone a little bit higher, rather than lower.

Vincent Brickley:  I would agree with what my colleagues have said. You need to draw a line in the sand and start from somewhere, and it is as good a point as any. That figure will encompass most of the rigid vehicle fleet and the heavy vehicle fleet. You have to review it in a couple of years and see whether there is a demand with people perhaps going to a lower threshold and then we start losing revenue.

Q 5

Andrew Bridgen: Could the Committee get any data from sources estimating or calculating the number of foreign goods vehicles entering the country below 12 tonnes plated weight, and what bands they are in?

David Amess: I understand that the Department has already received this information. We cannot get information ourselves, but if it could be sent to the Department then it could distribute it.

Stephen Hammond: That is helpful. If we have that evidence or it is sent to us, I will ensure that it is distributed to the Committee.

David Amess: Excellent.

Q 6

Michael Connarty: It is good to serve under your chairmanship, Mr Amess. May I follow up on Mr Brickley’s point? You seem to say that there is a difficulty in people accepting that payment has been made because no licence is displayed on the vehicle. I have used the roads in Australia, where my family live. You can buy a little thing that you stick on the windscreen, and as you pass any of the toll roads you do not have to stop, but you are then charged. You have an account. If you hire a vehicle, when you return it, it has all the charges you have incurred. Are you saying that you do not anticipate that anything will be put on the overseas vehicles to indicate that they are licence-paying? Would it be worth the expenditure to give people who register to drive in the UK something to indicate that they are licence-payers, or that would record their movements?

Vincent Brickley:  As you say, this has been done in Australia and many European countries have done much the same thing. It is a good idea to have a visible notice that they have paid, which can be done by the driver of the vehicle when he enters. I appreciate there is a cost to doing that, but it needs to be done. Otherwise, if a vehicle’s disc has expired, how will we know when it is not allowed to be on UK roads? The last thing we want is vehicles running around like that.
My concern is that if we do it electronically, we will need to ensure that the end date on the electronic tag ties up, so that the automatic number plate recognition systems can pick up the vehicle. We do not want operators coming back in and out because the expiry date on their electronic data tag is not well used, with them saying that it is paid, but no one sees that it was paid a year ago and they are still coming back and forth. A physical disc, perhaps in conjunction with a data tag, might be beneficial.

Michael Connarty: I am sure that that is most helpful to the people who draft the regulations in the Bill.

Q 7

Marcus Jones: Often, one of the greatest burdens on small and medium-sized businesses is regulation and red tape. Do you see this measure creating an extra administrative burden on your businesses, and how do you judge that? Is that extra burden proportionate, in your view, to what you would like to see achieved?

Vincent Brickley:  From what I have seen of the Bill, I think that good steps have been taken to make that administrative burden as little as possible for us as operators. I do not think we are going to have too much of a problem with it and, for me as a small operator, there is nothing to worry about in that regard.

David Heath:  I would echo that sentiment. All I ask is that the transition for a UK haulier be done over a 12-month period, because I renew the vehicle excise duty on my vehicles over 12 months. Rather than go with a big bang on day one, that should be part of the process.

Andy Boyle:  I would agree that it fits in with the KISS philosophy, which previous schemes have fallen decidedly short of. I applaud it because it looks as if it will be a light burden for the operator and a relatively light burden for the collector of the funds. That suggests a win-win.

Q 8

Michael Connarty: As my speech on Second Reading showed, I have many questions about the Bill. On liability for levy, the Minister said on Second Reading that the driver of the vehicle would be liable, but clause 4 clearly states that, for non-UK vehicles,
“each person who is the holder of a Community licence in respect of the vehicle is liable”.
Do you have any advice about who should carry the liability? Drivers could change regularly but the registered keeper would probably be static, as in your own situation. Do you agree that the driver of a foreign vehicle should not be the person to chase for the levy, since drivers are likely to change?

Vincent Brickley:  The only thing that you could really use the driver for is as the contact to the company, and the company itself should be ultimately responsible. Yes, you could approach the driver to get the fines; we currently have VOSA’s impounding requirements, which work quite well. I do not see why we could not work this along the same lines: if it is not paid, the vehicle does not move until such time as the charge is paid.

David Heath:  I would take a similar view—that the names on the operator’s licence are the people who are responsible for the vehicle and that, ultimately, they should be responsible for paying any fine.

Andy Boyle:  I would agree with that. During my career, the haulage industry has always been notable for having an inordinate number of twins about—there is always somebody with a similar surname who can put their name to whatever offence has been committed—but in the case of a foreign operator, the first feeling of the collar is the best. If you impound the vehicle, then they can argue about who will pay the fine because, thereafter, the vehicle does not move until money changes hands.

Q 9

Alan Reid: It is good to see you in the Chair this morning, Mr Amess. Do the witnesses think that the £5,000 fine provides enough of a deterrent to encourage operators to pay the charge up front, voluntarily? Is that fine set at the right level?

Vincent Brickley:  To me, a £5,000 fine is quite enough of a deterrent. I do not want to get a £5,000 fine, but I do not want a £500 fine either. Personally, for foreign operators coming in, a £5,000 fine is more than acceptable.

Q 10

Alan Reid: Do you think it would act as enough of a fear factor, even though you do not have a disc on the lorry? If you were going to a foreign country and could be fined £5,000, would you pay up front, even though there was nothing actually to show that you were there illegally—just the fear that you might get caught?

Vincent Brickley:  I think the British attitude is that we will pay any sort of tolls when we go abroad; we will pay our own way. I think for a foreign operator coming in here, the £5,000 is a strong enough deterrent. I do not think it needs to be any more. I just think it needs to be rigorously enforced.

David Heath:  I would think if you had a fine above £5,000, you would run the risk of the fine being greater than the value of the vehicle. You might end up with a vehicle being left in default. It is more the impounding of the vehicle that would affect the operator, because of the load that is probably on it. Liability claims from customers would force the foreign operator to pay up.

Andy Boyle:  Looked at in the round, the £10 a day that is proposed for the largest vehicles is not enough, but is as much as can be charged under EU law—with £5,000 ready to hit you on the back of the head if you transgress. The combination of the two will probably focus the mind sufficiently.

Q 11

Ian Mearns: It is a pleasure to serve under your chairmanship, Mr Amess. We have talked about the possibility of impounding vehicles. If we get serial repeat offenders, would you consider confiscation of vehicles or a custodial sentence for the owner or driver as being appropriate?

Andy Boyle:  We do not really want to go there, do we? That is where you end up up to your backside in alligators, because you probably end up with things you do not actually want. For repeat offenders you have to move on to stage 2. Impounding is an existing condition; VOSA has the right to impound. That is the place to start, I dare say, but really we want to stop the serial offenders before they come into the country. It would cost a fortune to administer anything like that.

Q 12

Andrew Bingham: What is your experience of paying levies like this when your wagons go abroad? Is there anything that is done abroad that we can learn from in this country? I am interested to know what sort of levies you have to pay when the wagons go abroad. Let us start with Vincent and move across.

Vincent Brickley:  Mine is a purely UK operation; I do not do anything abroad.

Andy Boyle:  Likewise, so I am afraid I cannot answer.

David Heath:  I rarely go abroad, partly because I am uncompetitive when I quote to go abroad, but that is mainly the tolls I am paying on the roads.

Q 13

Andrew Bingham: The road tolls that you pay on the auto-routes or whatever.

David Heath:  Correct.

Q 14

Julie Hilling: It is a pleasure to serve under your chairmanship again, Mr Amess. I would like to go back to the setting of the weight limit. I am afraid I cannot picture 7.5 tonnes and what that means in terms of vehicle size. Can you give me a little more information about the difference in damage to roads and the number of foreign operators coming over in vehicles of less than 10 tonnes?

Vincent Brickley:  Generally, I would sum it up as saying that vehicles under 12 tonnes are usually more urban vehicles than multinational. They usually have smaller wheels and are smaller vehicles generally. There are always exceptions and people will always have specific avenues where they want a certain smaller vehicle. Generally, the vehicles we are mainly targeting are going to be the very heavy end, the multi-axle rigids—the ones with more than two axles—and the three-axle and four-axle artics. There are the two-axle rigids which can get clouded in the 7.5 tonners as well. They look like a bigger lorry with fewer wheels; it is very hard to explain it to you.

Q 15

Julie Hilling: You seemed to indicate that there are some foreign operators coming over with smaller vehicles. Have you any idea of the quantity?

Andy Boyle:  I would have thought very small but, to me as an operator, they stick out like a sore thumb. You ask yourself why that is here. If it has come from Bulgaria or somewhere, you think, “Where are the economics of you bringing over a thing that small? It must be hauling gold bullion or something.”
It is a very small number. If you look at that back wall, that is roughly the maximum size of a 7.5 tonner both in height and length. That would take care of anything up to 12 tonnes gross, I expect. However, if they are hauling something extremely light, there could be a very large body on a relatively low carrying capacity—if they are bringing pillow cases or something. That would be very rare, and I cannot see the economics much, because I do not know what they are going to take back out of this country to help pay for their trip back to wherever.

Q 16

Gavin Williamson: Mr Amess, it is, of course, an absolute delight to serve under your chairmanship, as has been mentioned a number of times before. It is a real pleasure to see how warmly welcomed the Bill is on all sides; that is quite unusual for a Bill Committee sitting.
Why do you think there has been inaction? I remember campaigning back in the early 2000s for something called a Britdisc, but the last Government did not do anything. Why do you think they were so reluctant?

Andy Boyle:  I think spending £40 million on consultants probably knocked the job on the head before it had even started. Most of the previous schemes, however laudable the aims, have just been too complicated and cost too much to implement. I would be the first to admit that you are probably not going to bring in a huge amount with this levy, but it does level the playing field a little bit. It is at least fair. Why should we, as British hauliers, pay to have the roads repaired while our foreign competitors, in increasing numbers every year, do not? At the end of the day, it is just fair play. It is a token gesture and I hope it all comes to fruition very soon, particularly because the longer these things go on the more likely they are to wither on the vine again. This seems an admirable idea with not much downside for either the Government or the operator.

David Amess: Mr Heath, Mr Brickley, any comment?

David Heath:  I would like to keep the pace behind the Bill and I am pleased that it could come in during 2014 and not 2015. Rather than looking backwards, I would look forward and ask if we can try to get it over the line as quickly as we can and get a bit more equality for us.

Vincent Brickley:  I would vouch for what my colleagues are saying—that we just want an opportunity to have some parity. There is no point in looking backwards, as we have said. I see this as the way forward, with this Bill probably encompassing more and more vehicles in time. As an industry, we want to make sure that we do our bit to ensure it is right for the benefit of us an industry and of everyone.

Q 17

Stephen Doughty: Mr Amess, it is a pleasure to serve under your chairmanship in my first Bill Committee. I represent a south Wales constituency and have a heavy amount of HGV traffic, particularly with foreign owners, so I am particularly keen on this measure. Also, having experienced an HGV owned by a foreign operator smash into bollards and barriers in my constituency recently, I am obviously very keen they make a fair contribution to the wear and tear they are causing.
You undoubtedly have some contact with foreign owners and drivers—or your drivers do. Do you think that the foreign owners and operators recognise that this is, in some way, going to level the playing field; that the game is somehow up? Do you think they feel this in any way? Obviously this is only one step towards levelling the playing field, but do you think they recognise that this is a good measure?

Vincent Brickley:  In Wales, probably the biggest competitor is from southern Ireland. That is the biggest market that threatens Wales. I think there is a realisation that rather than just transit through the UK and not cost anything at all, they are actually going to have to pay for the privilege of transiting through the UK. That has got to be to the benefit of the UK economy, and better for the Exchequer.

David Heath:  I think generally it probably would not be welcomed by hauliers from other countries, and why should it be? From their point of view, they will see it as another tax burden, but I am representing a UK haulier.

Q 18

Stephen Doughty: Do you think that they recognise that this is going to be a step to level the playing field? Has there been any feedback that you have experienced from the foreign operators? Do they fear this?

David Heath:  I have not had any feedback. We do utilise a number of European partners, but I have not had any feedback on it.

Andy Boyle:  As a purely domestic operator I do not really have any contact with “them foreigners”, so I cannot really comment on their views, but I should think it is like asking a child if it wants a smack, really.

David Amess: On that controversial note, I call Mr Bridgen.

Q 19

Andrew Bridgen: I am picking up that the panel is obviously very keen to have some physical demonstration that vehicles have paid the road user levy. I put it to you that that is for the satisfaction of the domestic haulers industry to see that the levy has been paid, and perhaps to aid VOSA in the apprehension of transgressors. People who have not paid could be reported by business, haulier, and so on. If we did that, though, would we not have to bring in another fine for having paid the levy but not displaying a current tax disc? That would have to be a lesser fine of perhaps £2,500, for having a disc but not having it displayed in the window.
With regard to enforcement, do you agree that VOSA is fairly efficient most of the time, and that it would be a sensible way forward to stop vehicles from moving which were not displaying a road user levy disc, or which had not paid the levy, by the issue of a GV9, which would not be lifted until either the fine or the levy had been paid?

Vincent Brickley:  I would not personally want to see any additional burden on it. I think if we had a physical disc for them to put in the window, if it was not in the window they would be quite likely to get stopped. Personally, my view is that it is better to go with that at the moment for not displaying, rather than having another layer of management for failure to display. If you think it will generate some money for you, I would wholeheartedly—

Q 20

Andrew Bridgen: If you are not displaying a current tax disc in your lorries, you would get fined.

Vincent Brickley:  Yes, we would get fined. There is an argument about moving on with ANPR technology, and whether we now actually need a disc in the window, which could save the Exchequer some money. So there is the production of cost to take into account. We could perhaps remove the cost of the disc for the UK operator and use the money that we save from that to fund putting a disc in for foreign operators, and then perhaps have the fine for them instead, but I am not totally convinced.

David Heath:  The London congestion charge is operating without the disc and generally, if you infringe it, you do not get caught at the time but you get caught afterwards with photographic evidence of your being there. That is pretty effective technology that is being used in the capital at the moment. The other thing we should be doing is looking at number plate recognition on the roads leading out of the country. That is important, because you could have a haulier come in and buy a disc or a permit for one day and be here for a week. Going out from Dover or whatever port that haulier may have gone from, they would be valid. You need to have cameras checking them as they come back to the main ports in the UK, to clock up how many days they have been here and how many days they have paid for and to see if there is a delta between the two. It would be quite easy to come in and buy a one-day pass and be here for a week.

Andy Boyle:  I concur with David on ANPR, but as far as bringing in a separate fine for not displaying a disc, if a UK operator is not displaying a disc, it is usually because he has not paid the money. I do not think that you really want to complicate the issue. You can probably trace it back to the fact that the vehicle does not have a disc, and you can impound it until the money for the disc is paid, rather than having too many levels of fines. I think that that would be dangerous.

Q 21

Jim Fitzpatrick: Gentlemen, you have all acknowledged that the amount of revenue raised from the scheme is not going to be massive. You will also have seen, I am sure, that we have had discussions about hypothecation and where the revenue raised should go—whether it should go to road maintenance, infrastructure etc. I was interested in a comment made by, I think, Mr Boyle, that the money should go to VOSA. Was there a reason for your nominating VOSA as a recipient of the revenues? Was it to improve enforcement? Do you think VOSA is suffering a bit at the moment?

Andy Boyle:  Part of me would like the money purely to go into the roads budget, which is always being abstracted elsewhere. I want this amount of money, big or small, to be ring-fenced to be used within the haulage industry. VOSA is basically underfunded, but it was given 22 or 23 million quid a few years ago—was that under your guidance? It was thereabouts—on the change somewhere. That was to help target enforcement rather more widely. The money was not an ongoing affair, so I would like to see VOSA’s enforcement adequately funded. With the best will in the world, we have got the system up and running, but if nobody enforces it, our sitting around the table here today will be a waste of time. That is my take on funding VOSA, but I also want the potholes in the road filled in.

David Heath:  There would probably also be a correlation between the hauliers who do not pay and the hauliers who have defects on their vehicles. Again, I would not want all of the money to go to VOSA, but if you believe this can be done on the existing manpower and staffing within the VOSA operation, you will struggle. Putting an element of the moneys recovered back into VOSA would allow us to target hauliers who probably have other defects and possibly cause a risk to health and safety on our roads.

Vincent Brickley:  I would agree with David’s views wholeheartedly.

Q 22

Marcus Jones: On the rebate, which is obviously something that all of your companies will be involved with, do you think that the Bill contains sufficient provision to discourage fraud in relation to how the rebate will work?

Andy Boyle:  Provided that the rebate is taken by way of taxing your vehicle, the only fraud is not taxing your vehicle, as I see it. If it is done in one movement, and the money is taken for both at the same time, I cannot see that someone just would not be taxed as opposed to someone not being taxed and also not having the rebate.

Vincent Brickley:  My understanding is that the current collection method for the duty and road tax that we pay at the minute will carry on in the same way, and there will be an internal Government split of the money. That is where you have got my support for reducing my administrative burden, because there is nothing extra for me to do. I see that as being done internally.

Q 23

Michael Connarty: My point has mainly been covered by an earlier question, but I was quite buoyed up by the fact that road hauliers were quite happy that this was not going to make a large amount of money and therefore defray their costs by reducing their HGV licence costs. However, I notice that it is anticipated that it will make £80 million net—I hope it is net—between 2013 and 2017, so it is not a great deal of money over that period. However, it is, in fact, anticipated that that will go to the Consolidated Fund, in other words, into the Chancellor’s back pocket. You have clearly expressed the view that it should go not into the Chancellor’s back pocket but into transport uses, specifically to VOSA. You have cleared that point up, and hopefully everyone is listening and will speak to the Chancellor appropriately and tell him to keep his hands off.

Andy Boyle:  I am adamant in the view that it must be ring-fenced and not allowed simply to slip into the general Exchequer.

Q 24

Michael Connarty: As, for many years, the fines for speed cameras went into the Treasury, not into anything relevant to the roads.

Vincent Brickley:  The other thing we have got to look at is that if we get stronger competition from EU hauliers operating in the UK, there is a requirement to improve road safety. We have very good road safety in the UK, but our foreign competitors are perhaps not as good, so some of that money must be ring-fenced to make sure that VOSA can enforce road safety. The last thing we want is an open market and road safety taking a serious tumble.

David Heath:  A final point on that is that when you pay a toll abroad, a lot of that toll money will be used to maintain the road on which you are paying the toll. If you are trying to benchmark against European countries, I think it is important that the money is ring-fenced.

Q 25

Michael Connarty: To follow up on a point that I made and to tidy up the question of the rebate system, I noticed also—one of these wonderful comments made by Government—that, “by and large”, UK operators will be no worse or better off. “By and large” could mean anything; how long is a piece of elastic? Are the hauliers satisfied with the system that will be used for the rebates? Are we sure that once the money has been paid in, there will not be a cash-flow problem caused by waiting for the rebate to reduce the amount that is paid? Will the defraying system be automatic and immediate? Clearly, if there were problems with paying tax and receiving rebates—

Andy Boyle:  As I understand it, if I currently go and tax one of my artics at £1,200 a year, the rebate will be built into that £1,200. I will, as always, go and pay 12 months in advance for taxing the vehicle, but the rebate will come within that £1,200. The amount we are talking about not being equal is very small beans. To say that all hauliers will not whinge is a complete understatement, because there will be those who have not even heard of it yet and they will be whinging about it for months afterwards. Having studied form, however, I am quite satisfied that it is not going to eat into my pocket or anybody else’s in any significant way.

Q 26

Alan Reid: Mr Boyle said earlier that the Bill would level the playing field a little bit. Have you any suggestions for changes we could make to the Bill that might level the playing field more?

Andy Boyle:  Seeing as you are stuck with EC legislation, I do not know how much further you could go, but if any of you has got any ideas, don’t keep them to yourself; introduce them, please. It is long, long overdue that the foreign operator pays some share—we have got a long way to go before we get a fair share—so, as I see it, this is a foot in the door. It is not going to be a huge win for a UK operator, but it brings some other people to the party.

Alan Reid: Any suggestions from any of the others, other than changing EU law?

Vincent Brickley:  Not really.

David Amess: Are there any more questions before I bring the Minister in? The Minister, then.

Q 27

Stephen Hammond: Thank you, Mr Amess. Gentlemen, thank you very much for coming in this morning. Thank you for your support for the Bill, and for the recognition that we have tried very hard to keep administrative costs low. I am grateful for that. To clarify, we believe that 94% of UK hauliers will be no worse off than they are now, and 98% will by worse off by only £50 or less. That is how we tried to create the scheme.
Can I go back to three things that I want to test you on? The first is back to the point about the disc. The Department obviously considered very carefully whether to go down the line of some physical recognition. One of the reasons why we chose not to do so was the administrative cost on everybody. Secondly, there was the possibility of fraud by foreign hauliers and thirdly, the ANPR system is now sufficient, with the database that will be constructed. Could we have your comments on that?

Vincent Brickley:  My view is that we do need a disc in the vehicle. The disc is a visible signal that the foreign haulier has paid for it. While I understand there is a cost to that, I just think it is worthwhile to do. It is not necessarily other hauliers who will look at it. It is perhaps when you are in the delivery point and in the large multinationals. They will look and see whether they are legitimate operators. In a lot of the tenders that we go for, we have to make sure that we have a valid O licence and all the bits of pieces, and that we operate within the law. This is just another tick box for them to turn round and say, “Yes, these operators are operating.” It is quite important that we have a measure and I think it would be worthwhile. On ANPR, I come back to what David said earlier. We perhaps need to have that on the way out. How else will we know that a haulier who has paid for a day has not been here for a week or longer?

David Heath:  I can answer only on behalf of my company, and I am probably not behind having a disc. I believe the technology has moved forward and will continue to move forward. There is the practicality, particularly for a foreign haulier perhaps coming over just for a day—where do they get the disc from? Do they buy it on the boat? It becomes tricky, and I think that we should rely on technology that is out there.

Andy Boyle:  You probably have the charging system about right, because there probably are not very many who come over just for the day or for the week. The majority probably come regularly, and the charging system suggests that they would be better off buying an annual ticket than a daily or a weekly ticket. So I think it is probably taken care of. Once again, my view is that I want this levy introduced and introduced quickly. I do not want any unnecessary cost complications to cause you to dither and change your mind and kick it into the long grass—again.

Q 28

Stephen Hammond: I can assure you that there is no intention to kick it into the long grass. Far from it: we have moved quickly to ensure simultaneous introduction.
Can I just test you on the point of fines? I think I clarified on Second Reading what the Secretary of State had said and extended that to say that if a UK haulier infringes, then it is the registered owner who pays the fine. If it is a foreign vehicle it will be the driver, because they are physically present, unless we have the address of the keeper and then we will fine them. We took suggestions on this. Does that seem a sensible way forward?

Vincent Brickley:  I think you have to be careful. If you have the address of the foreign owner, how will you pursue that through the European courts to make sure that you get your money back? With the physical driver, if you do not allow the driver to leave until he has paid you can impound the vehicle; you want the money before the vehicle moves on.

Q 29

Stephen Hammond: We can take a deposit off the driver against the keeper, and we can impound the vehicle as well. So both of those are possible.

Vincent Brickley:  That is a good idea. Myself, I think that is definitely the way.

Andy Boyle:  The driver will be issued with running money by his employer anyway. I do not think he would be paying on his own card. Anyway, possession is nine tenths of the law. You get the money while you have the vehicle at hand.

Vincent Brickley:  I would strongly be for not letting the vehicle out of your control until it is paid.

Q 30

Stephen Hammond: We have, potentially, those powers. Finally, can I come back to enforcement and VOSA? I have two points. First, I believe it was Mr Boyle’s comment that it is well known where VOSA sits on the roads of this country. If he would care to let us know, so that I can ensure that VOSA does not sit on those roads, but sits on other roads, I would be very grateful.
Secondly, in terms of enforcement, clearly VOSA will need extra moneys because of the extra duties. The Department has done a calculation for that and will be making somewhere between £500,000 and £1 million extra available to VOSA to do that, and VOSA thought that that was an adequate sum. Do you have any comments on that?

Vincent Brickley:  If VOSA is happy with that level of extra income, it is the expert in that field. My main concern is that we ensure that everyone has paid.

David Heath:  I am of the view that £500,000 to £1 million means that, with two operators in a 4x4 costing probably £150,000 to £200,000 per vehicle, there would be about five extra vehicles on the UK’s roads. It might be proportionate, but do not think that it is a lot because it is not. In the whole of the UK, it is probably five vehicles over and above what we have now.

Andy Boyle:  I would go along with that. I will add no further comment.

Stephen Hammond: Thank you for your time, gentlemen.

David Amess: Colleagues, were there any other questions that anyone wanted to ask or are we all done? That being the case, I thank our witnesses very much indeed for the time spent with us today. We are pleased that you are pleased and, on behalf of the Committee, may I wish you all a very happy Christmas?
Examination of Witnesses

Steve Hanley-Cook, Tim Slater and Phil Spittle gave evidence.

Q 31

David Amess: Good morning to our new witnesses. I do not know whether you were here at the start of our proceedings, but I assume that none of you has previously given evidence before a parliamentary Committee? My colleagues are very pleasant indeed, and they understand the pressure you may be under. This is simply an evidence session, so this is your opportunity to enlighten the Committee and to share your views as thus constructed. Would you kindly introduce yourselves and, perhaps, make a brief statement on the Bill, starting with Mr Slater?

Tim Slater:  Thank you, Mr Amess, and I thank you for the opportunity to give evidence today. I am Tim Slater, the managing director of DHL Supply Chain’s transport division in the UK and Ireland. I am responsible for about three-quarters of our UK and Ireland fleet, which in total across our five divisions is around 9,500 vehicles, of which about 4,300 are covered by the Bill.
We very much support the Bill and the objective of levelling the playing field for UK hauliers. From a UK perspective, this is a small step forward to creating that level playing field, and we support the key principles of cost neutrality and of a reduced administrative burden, as some previous witnesses mentioned.
We have a number of concerns or clarification points, really about understanding how the Northern Ireland-southern Ireland border crossings will work and how the existing, reduced pollution certificate rebates will be impacted. We also have a number of vehicles—as much as 20% of our fleet—that will pay higher levies, so we are probably one of the more affected companies because of the nature of some of our vehicles.

Steve Hanley-Cook:  Good morning. I am Steve Hanley-Cook, and I am the vice-president for our full load truck business across the pan-European sphere. I am based in Brussels. From a functional role, I look after the co-ordination of all of our network across Europe, including the UK-inbound, for which we have more than 70,000 single movements per year. In respect of the Bill, I endorse my colleague’s comments and also the points that he raised for clarification.

Phil Spittle:  Philip Spittle, Stobart Group. I am responsible for compliance in terms of safety and legislation with regard to our trucks. We have 2,000 vehicles. We support the Bill and, as my colleagues have said, the RPC is a concern to us. It is a rebate that is given to hauliers, which may disappear with this Bill.

Q 32

Jim Fitzpatrick: Good morning, gentlemen. Obviously, you have heard the previous discussion, so you know the general direction in which colleagues are moving. Mr Slater, will you elaborate on your comment that you anticipate that about 20% of your fleet will be affected? Will you describe what that means to the company and how it will affect you?

Tim Slater:  Of the 4,500 vehicles impacted by the Bill in total, about 1,000 fall into the category of 2x2 artics or 2x1 artics, so really it is a high-street delivery fleet. They are delivering into the high street, into the pubs. We have a very large pub business that delivers on behalf of a number of the brewers and also our fleet that delivers on behalf of high-street retailers, particularly the fashion retailers. Because of the number of axles on those vehicles, they are impacted quite considerably from the duty and levy changes. That will have an impact if we cannot downplate those vehicles, and we are still looking at whether we can do that, probably increasing our vehicle excise duty levy charges by about 2% across our fleet.

Q 33

Jim Fitzpatrick: How much would that be in monetary terms?

Tim Slater:  That is about £80,000.

Q 34

Jim Fitzpatrick: And Mr Spittle, the assessment of the impact on Stobart?

Phil Spittle:  Based on the numbers I have seen, there is no impact. It is cost neutral.

Q 35

Andrew Bridgen: May I also make a declaration of interest that we have a large operating centre for DHL in North West Leicestershire in my constituency, which employs some 4,500 people? Regarding the administration of the Bill, which we mentioned with regard to the smaller hauliers, do you see any impact of added administrative burden if the levy were to come in at the moment? Perhaps also a question we asked the smaller hauliers which they could not answer because they were basically UK operators: what are the costs for a UK operator trying to tout for business in continental Europe?

Tim Slater:  If I may answer the first question and my colleague will be very well qualified to answer the second question. In terms of administration, as we understand the Bill at the moment, we do not see that being an issue for our business going forward.

Steve Hanley-Cook:  In terms of UK hauliers entering the European market, that is the question you have asked. The major impact for them is really labour costs and the tolls on the continent versus tolls coming into the UK. This is the big differential in the pricing.

Q 36

Andrew Bridgen: You are aware that we cannot set the daily road use at any more than €11. That really does not compare with the cost of a UK haulier moving through Germany and paying €100 for 300 miles.

Steve Hanley-Cook:  Indeed not. The European tolls are based very much on emission and distance-based. This compensates in part for the fuel costs being lower in Europe, as we know, but in terms of the overall costs we come back more or less to the same number, because the compensation is that the toll is significant to the UK. You are paying anywhere in the region of €0.16 or €0.17 for a Euro 5 truck in Germany so it is a significant proportion of the costs for a continental carrier transiting Germany.

Q 37

Andrew Bridgen: Do you want to explain to the rest of the Committee what a Euro 5 engine is?

Steve Hanley-Cook:  The Euro 5 is the cleanest engine that you can put on the road at the moment. So, it is based on the emissions.

Phil Spittle:  I do not see any administrative burden. All of our vehicles are UK based. In terms of the costs, it is far more expensive for our vehicles when they do operate abroad, but that is purely on tolls.

Q 38

Julie Hilling: I did not quite follow why it is costing you more. I understood the argument in relation to vehicles, but why is that going to be more?

Tim Slater:  There is a certain type of vehicle at the moment with a very low VED. Because of its axle configuration, its levy rebate is low. Add the new VED and the new levy together for certain types of vehicles and you will pay anywhere between £20 and, I think, about £75 a vehicle more for the new combined rates as a UK-based haulier. There are 94% not affected and 98% slightly affected. Because of the nature of our fleet and our customers—some of the major supermarkets and retailers—we have a disproportionately high amount of fleet that falls into the affected vehicle categories.

Q 39

Julie Hilling: The VED is less at the moment than the charge levied?

Tim Slater:  It is. The reason the charge is levied quite highly against those vehicles is because there is a fewer number of axles. They are shorter vehicles because they are going round city centres in London. That is about making them safer and more efficient at doing the job that they are designed to do. You would not want to make those vehicles any longer. From a safety and manoeuvrability perspective, we would not want to add axles to those vehicles. It is quite a specialist job, as you can imagine, when you are delivering to pubs across London and other city centres.

Q 40

Marcus Jones: Mr Slater, I was interested in the comments that you made in relation to the Northern Ireland and Republic of Ireland border. You raised an important point about enforceability. Can you expand on that, and what are your views on how the levy might be administered or enforced on the Northern Ireland and southern Ireland border?

Tim Slater:  We manage our operations in Ireland as a single entity, so there is effectively free movement between the north and the south. It is a key principle of how we operate our business in Ireland. I understand that the Bill needs to comply with EU legislation, but there are some unanswered questions about how the levy will be applied between Northern and southern Ireland: whether any special measures will be put in place and whether there have been discussions with the southern Irish Government. We are waiting for clarification on whether there will be any differences in how the levy will be apportioned between those two countries. We are certainly looking in detail at our operations in Ireland at the moment to see if we can run things in a slightly different way on the back of the Bill coming into force.

Q 41

Marcus Jones: Do you think that the Bill will actually put Northern Irish hauliers at an advantage over the southern Irish within the footprint of Ireland? Road fuel is usually cheaper in southern Ireland and a lot of Northern Irish haulage firms travel south of the border to fill up. By virtue of that, you would expect that it would put the Northern Irish haulage companies in quite a good place. Would that be the case?

Tim Slater:  Building on the comments from my colleague, the levy is a very small proportion of the operating cost of a vehicle: less than 1%. The fuel differential that exists in a certain part of Europe can have an impact of as much as 8%, so I think the levy is not going to be enough to sway any benefit towards Great British or Northern Ireland hauliers.

Q 42

Michael Connarty: May I follow up the question of merging the two duties that Mr Slater recommended? Have companies been involved in any type of negotiation or discussion in detail with the Government? Do you have a suggestion about how the two duties might be offset so that a cost-neutral conclusion can be reached?

Tim Slater:  No, we have been in no negotiations. We are waiting for clarity on the Bill and whether there will be any special exemptions for Northern Ireland and southern Ireland.

Q 43

Michael Connarty: In my speech on Second Reading, I anticipated that there might be some benefits and reductions for the road hauliers in the UK, but it is not going to raise that much money. However, it seems that it is going to raise an anticipated £80 million over the next four-year period, so some of that might be put back into the coffers of the road haulage industry, which I know is suffering. I represent Grangemouth. We have a large number of road hauliers, as you can imagine, who are suffering from the excise duty costs on their business. They might benefit from some levelling out of the playing field by not adding to the costs—even a small amount of costs—that they carry at the moment.

Tim Slater:  The industry works on low margins, high volume, so any support to the industry is greatly welcomed. Indeed, any support that can make the industry safer, more environmentally friendly and more efficient is welcomed by DHL and, I am sure, the rest of the industry.

Q 44

Kwasi Kwarteng: What is your view about the money being raised by this levy? We have been told that it will not necessarily be a huge amount, but there is a suggestion that we should hypothecate this money exclusively for road maintenance. I wonder whether you have a view on that issue and what that view is.

Tim Slater:  I’m not sure it is for us to decide how the Treasury spends its money, but it would be nice to think that the money does go into the roads and the objectives, as I just said to your colleague, of making the roads safer and more efficient and helping us to reduce congestion to help the roads flow better. More money into the maintenance of roads will always be welcomed.

Q 45

Kwasi Kwarteng: Do you share that view?

Steve Hanley-Cook:  We share that view.

Phil Spittle:  I agree it should be related to operations in some way, rather going into a black hole.

Q 46

Ian Mearns: By comparison with the previous witnesses, you are larger operations. By comparison with some of your European counterparts, which are actually working in the British market, how much advantage does the lack of such a levy give them at the moment? Is it impacting on your business or is it detracting from your business, to the benefit of European counterpart operations?

Steve Hanley-Cook:  I can answer that. Around 85% of the transport from the continent that runs into the UK is on non-UK registered vehicles. Much of that is down to the base costs of the countries of origin. It is a free market and the labour costs in Bulgaria are less than in the United Kingdom. The fuel that they transit to the UK, as within this document, is clearly a factor in why they are more competitive, but the market sets its rates and the rates that it sets to go to the UK will of course increase if road tolls increase, the same as how, when Germany introduced road tolls, the market rates increased inside Germany. At the moment, the market rates reflect the fact that if you are coming relatively short distances, from the German rural or Benelux area, the rate reflects the fact that there are very few road tolls to go to Manchester and Birmingham. The market rate dictates the effective rate and it is, unfortunately, based on the lowest cost denominator from the hauliers that are able to reach that rate and it is as simple as that.

Q 47

Jackie Doyle-Price: I am interested in the competitive challenge that you continue to face, because, as you have said, this is a small step towards levelling the playing field. Following on from the point that you made about the number of foreign lorries, in your experience do they tend to be from bigger companies like yourselves operating on the continent, or do they tend to be smaller operators?

Steve Hanley-Cook:  It is very market dependent. Each market has developed in a different way. Some markets are very much dominated by large carriers and you can see the names of those carriers regularly on the road in the UK. Other markets have developed much more on a small owner-driver, four or five-vehicle basis. You cannot give a clear answer. If you look on the roads, you can see five or six regular names that will come up the M20 from Dover and clearly they have niches in their origin markets and that is how it has developed.

Q 48

Jackie Doyle-Price: The reason why I ask the question is because I am interested in the impacts on wider road safety. Obviously these foreign vehicles will be brought into the scope of regulation for the first time. Anecdotal evidence—bear in mind that I represent a constituency where logistics and haulage are big business—suggests that there are a lot of operators out there who are not familiar with our safety practices. Do you think that there might be some advantages from bringing them into that scope?

Steve Hanley-Cook:  Yes, of course.

Q 49

Jim Fitzpatrick: You will have heard that the previous witnesses had a disagreement about the enforcement procedure and whether it should be visible disc or ANPR. Notwithstanding the Irish border questions, do you have any views on how enforcement should operate?

Steve Hanley-Cook:  It is common to have a visible disc or sticker in other territories in Europe, where a Eurovignette is required. I believe that that is the correct way to do it.

Phil Spittle:  I do not actually agree with that point. If we take out Ireland, as you said, we have the advantage of being an island. You should really be able to monitor vehicles in and out, as long as there is a commitment to pay. It was mentioned earlier that some people may think they are going to be in the UK for two days. They may be in for three or four days. They may come in and pay for two days only to find that they are here for three or four.
If there is a commitment to pay, you can check on someone coming into the country and going out in every instance. That should be fairly simple to enforce, just as congestion charging is, or entry and exit from a car park. There is no other way in or out, other than, obviously, the Northern Ireland-southern Ireland border. I really do not see a need. If you take 5,000 vehicles coming into the UK in a day, and you have got to give them a printed disc, and tomorrow 5,000 different vehicles come in needing a printed disc, suddenly it becomes a very expensive administrative burden.

Q 50

Martin Vickers: I have spoken to many hauliers in my constituency, which includes Immingham, which, as you will know, is a major centre for the industry. While they are very supportive of the Bill, they express reservations about whether the deterrents are sufficient. Do you believe that the fines are adequate and could you expand on your thoughts on that? Should a custodial sentence be imposed for severe cases?

Tim Slater:  I think the deterrents are sufficient. We need to think about the enforcement in two parts. You have your very large reputable companies, overseas companies, that will be well organised and will purchase the levy, probably for a year. They will have people at their head offices who will organise and manage that. The challenge will be for the smaller owner-operators, the drivers who may be away from home for many days or weeks at a time, and how they purchase the levy in the first place, how they are aware of the levy. I understand that the proposals are for a total electronic solution. We need to give some thought to how owner-drivers coming into the UK can buy the levy when they arrive, if they may not have access to technology.

Phil Spittle:  I think £5,000 is a reasonable deterrent. It depends on enforcement, not the fine. It is catching people to enforce that £5,000. It is a risk that some people may take if they believe that there is very little chance of being stopped.

Q 51

Pamela Nash: My colleague, Mr Vickers, asked about the possibility of a custodial sentence. Do you think that would be appropriate in the more serious cases? Who would you suggest is ultimately responsible, if it was one of the employees of your large firms?

Tim Slater:  I think I agree with the previous witnesses that tracing some of these vehicles and drivers, particularly of the smaller firms, is going to be difficult. Once they are out of the country that could be quite hard. For the serial offenders you need to think seriously about having some serious consequences for those people who continue to offend and evade. I think we have seen evidence from other countries that people are quite creative in evading. Maybe at £10 there is not such an incentive to evade. Certainly, in Germany where the toll is quite high, there are quite creative ways of evading the tolls.

Steve Hanley-Cook:  Yes, I can only endorse that. There are very creative ways, from drivers and operators alike, to evade tolls, to avoid tachograph rules. We know of them. False number plates are, of course, often used on the continent by less-than-reputable hauliers. We have lost loads to hauliers with false number plates, so recognition of number plates will not necessarily tackle enforcement of the payment of the levy. The drivers are often unaware of the cross-border rules on what should be in place. That onus should really be on the operator, the owner of the international permit and his company. They are the people who must be stopped.
Drivers are often the innocent parties because, as the previous panel mentioned, they often rotate. If we look at some trucks crossing the continent, the number of black boxes and stickers in their windows is quite a challenge for a driver to tick to make sure that he has all of them working and in place. The enforcement has to be against the company, the owner of the vehicle.

Phil Spittle:  The greatest opportunity to recover moneys, whatever those moneys are, is at the time the vehicle is on the roadside, because lots of parties are involved. The sender of the goods, the receiver of the goods, the driver and the owner all want to get that vehicle moving, so there is an opportunity then: if people pay, the vehicle moves. That is the only time to take the funding, whatever the fine or what they have not paid.

Q 52

Pamela Nash: Just one follow-up question. Mr Hanley-Cook, you have told us a lot of stories and given us a lot of evidence of how people try to evade payment. Would it not be better to have a larger fine in such cases to act as a deterrent, rather than jumping from £5,000 to a custodial sentence?

Steve Hanley-Cook:  To put it into perspective, £5,000 is the average annual profit of one truck for a carrier from the east. It is a sufficient deterrent for a major haulier to say, “We are not going to take that risk”. You can count on 90% of carriers not taking that risk. The remaining 10% are guys who are crooks or criminals anyway. They will take that chance, whatever we do.
I agree with Mr Spittle that repeat offenders should be absolutely impounded at the time. The money should be taken, but you have to find a method of how to get the money as quickly as possible. It is perhaps thought that you could consider payment by fuel cards as most drivers do not now have running money. They do not have cash. Everything is put basically put on their DKV or euroShell cards, such as the tolls and the fuel. That might be one way that we can quickly collect the fines, rather than wait for bank transfers that may never come from a fraudulent company and the driver being left somehow in a UK prison for weeks because the money never comes. We certainly have cases on the continent where drivers have been in France for five or six weeks because the company they work for will not pay, and the driver is left. There has to be a very clear practice on how we can recover the money once the truck is stopped.

Q 53

Andrew Bridgen: Given that many heavy goods vehicles across Europe are leased or hired and the ultimate owner may well not be the registered operator, will the panel think about who should be ultimately responsible for paying the levy and the fines for non-payment of the levy? Should it be the driver? Should it be the owner of the vehicle—whoever that might be—or the registered operator, or a combination of all three or someone else?

Steve Hanley-Cook:  Across Europe, regardless of the owner of the vehicle, whether it is the bank or the leasing company, the vehicle has to be put on the operator’s licence. It will always be on there.

Q 54

Andrew Bridgen: So you maintain that the registered operator should be responsible for the levy and any subsequent fines?

Steve Hanley-Cook:  Yes.

Tim Slater:  I support that.

Phil Spittle:  Yes, I agree.

Q 55

Michael Connarty: We are into the meat of the problem; these problems are always in the detail. These are issues that I raised in my speech on Second Reading, when the Minister’s response was that the fine would be on the driver. We heard earlier this morning that the driver would somehow be levied for a portion—a deposit of some kind—with anticipation of the rest coming from the user. From what you are saying, that does not strike you as being viable. We heard your colleagues from smaller road haulage companies say that there should be an impounding of the vehicle. You seem to be echoing that, saying that the vehicle does not move until the money is paid.
As you have explained, the concept of running money of several thousand euros is not likely to be the case for the driver. The card system sounds pretty foolproof, because it would have to be taken from the card immediately before the vehicle moved on. You are saying it should be on the user or the operator licence of the vehicle, and it should be paid from their sources before it moves.

Steve Hanley-Cook:  Yes.

Q 56

Michael Connarty: What about perishable goods that might be in the trucks? How would we handle that?

Tim Slater:  I think there needs to be a discussion with the first guy and there needs to be an escalation. In most cases, you will resolve it with the driver, who will pay on behalf of the operator. You then go through an escalation that could involve the impounding of the vehicle.
Perishable goods are always quite difficult. We often get issues at Customs with perishable goods, and it does get the mind focused on resolving the issue and moving it forward. In our experience of other issues—when things get stuck at Customs, for example—when the goods are more perishable it focuses the mind and you tend to get a quicker resolution than if the goods are not perishable. That will focus the mind and get things moving, because ultimately the haulier has a responsibility to his customer to deliver those goods on time and in full.

Phil Spittle:  I agree. I think that someone who has a vested interest the goods, particularly if they are perishable, will find a means to pay, and the vehicle stays where it is until such time as it is paid. It doesn’t really matter who pays it, as long as the money is paid.

Q 57

Michael Connarty: On the question of the payment method for the levy, I am getting the view that what seems to be anticipated is that people will pre-pay. If they turn up without having paid, they are liable for the fine. As you have said, for an owner-driver of a small company, or if there is a change to a driver who has not necessarily driven into the jurisdiction, there seems to be a serious risk of being fined for lack of knowledge, rather than an intent to defraud or deny the Revenue of the money.
For the congestion charge, you get notified if you are in a congestion charge area if you have not pre-registered and you get a chance to pay. You do not end up with a fine right away. How do we avoid that and make it fairer? We want to raise revenue and contribute towards levelling the playing field, but we do not want to be punitive. We do not want drivers finding themselves to be in breach just because they do not know the system. Do you expect that there would be a notice to pay as well as the requirement to turn up with the levy pre-paid? There seems to be a high risk of people being fined for lack of knowledge.

Steve Hanley-Cook:  I think the advantage we have here is that the ports of entry are limited for self-drive traffic into the UK, and that could be your control point. I believe there should be a visible sticker, and maybe number plate recognition running parallel with that, because it is easy for the border control, seeing a truck that has not got a visible sticker arriving in Calais, to make sure that that driver pays the levy—

Q 58

Michael Connarty: But we are not going to have a sticker system. At the moment, it is anticipated that there will not be any form of physical recognition.

Steve Hanley-Cook:  I favour a sticker system because it is visible to border controls in Calais and border controls in Folkestone, on the way back. The truck should have something on the window when it comes through. That would at least give the smaller owner-drivers the chance to go to the side and pay before they enter.
As my colleague mentioned, most large hauliers from the continent regularly run to the UK. If you do the maths, they will buy a £1,000 levy, which costs them £4 a day on 260 days a year. It does not make sense that they pay every time they come to the border. I would say that two thirds of the fleet we operate to the UK will regularly come to the UK and will pay the £1,000 up front as a one-off for the year. That gives them £4 a day operating costs to the UK. Only the infrequent, ad hoc small trucks will maybe pay the £10 at the border.

Tim Slater:  Irrespective of a sticker, it would be good to give people an option to pay on arrival. There are those who cannot go online prior to buy it. I think that will be quite a small number, but that is an option and we should think about how to provide it.

Phil Spittle:  I think there are a lot of opportunities to remind those users. Again, they either come in by Eurotunnel or by ferry. Every ferry company could ask whether the pre-payment has been made, and, if not, there is an opportunity to pay either when leaving the country that the ferry starts out from or when it arrives in the UK. There are plenty of opportunities to remind people.

Q 59

Kwasi Kwarteng: It was suggested earlier by the first panel of witnesses that this measure would only go some way in terms of redressing the balance of the cost on foreign hauliers. Do you have a view on how, in future, we could make it more fair without simply raising the levy?

Tim Slater:  In terms of this Bill, I think you are quite restricted in anything else you can do. The big issue still remains the fuel duty. As my colleague said earlier, when you are operating in Germany, there is a pretty level playing field, because fuel duty and levy charges balance each other out. In the UK, for a foreign haulier coming over with a full tank of fuel, as we said earlier, there is probably about an 8% impact on his operating costs. That is the biggest single differentiator. Yes, there are other areas around labour costs and things like that, but fuel still has the biggest impact on the difference between the two companies.

Phil Spittle:  I concur with that. Diesel in the UK is one of the cheapest markets in Europe—the raw material—and the duty is much higher.

Q 60

Pat Glass: May I come back to the issue of enforcement and impounding vehicles? Clearly, we do not want any of the costs to fall on the British taxpayer. Would it be sensible to have a cost-per-day to cover the cost of impounding vehicles and a time limit for those who simply do not pay up so that the vehicle can be sold and the taxpayer reimbursed?

Tim Slater:  I think it would be logical to have some sort of end to the process, because you cannot impound a vehicle ongoing. It would make sense to have some escalation that eventually ended in the vehicle being sold. It would seem to make sense to terminate the process.

Phil Spittle:  I agree.

Q 61

Pat Glass: Do we need to have that on the face of the Bill, or can it come in guidance or later regulation? Or does it matter?

Tim Slater:  I’m not sure it matters to us, but I guess it needs to be part of the Bill. I don’t know.

Q 62

Andrew Bridgen: As the panel have already agreed that it really ought to be the registered operator who is responsible for paying the levy and any subsequent fines, will they explain to the Committee the operating system and the maintenance of good repute and financial standing on the O-licence system, which I believe operates throughout the EU, and how that is likely to mean that those operators will pay the levy and/or the fines? What about the system for vehicles entering the UK that are not from EU sources? Is anyone aware of how that system works, and whether they are likely to come under an operating licence system, say from Turkey or somewhere else?

Steve Hanley-Cook:  The hauliers entering the UK from those countries also have international “seen it” permits, which is a similar system. It is not quite as transparent as the European operating licence system, but it is broadly a similar system in those countries—the operator must show good repute, be clearly audited for his tachographs and compliance, have his vehicles on his licence, and show financial stability. So it is a similar system, but it does vary from territory to territory. I think you would have to look at that on a country by country basis as to whether there are loopholes or obstacles to collecting money from those countries.

Phil Spittle:  I am not familiar with the rules outside the EC.

Q 63

Julie Hilling: If I may, I will ask two questions. First, it sounds like a really good idea to actually have something on the vehicle that shows it is registered. My only worry about that is that we know how easy it is to forge just about everything nowadays. Do you think having that would potentially lead to complacency?

Tim Slater:  It is quite challenging on the stickers, because someone can come for a day, two days or three days. They can come on Monday and go on Tuesday, or come on Thursday and go on Friday, so it feels like quite a complicated system. In terms of enforcement, I guess our view is that there is a visible sticker there, but you are absolutely right, there are all the challenges of fraud and actually just making sure that the stickers are correct and properly time-dated. There could also be delays; people could come in and get held up at a delivery point, and given the driver’s hours, could look to extend their visit as well. So there is quite a complicated set of processes of how people procure their discs. Again, I think our view is that most people will buy a year’s levy, and therefore that could be a simpler visible sticker.

Phil Spittle:  By means of having the sticker you actually make it easier for people to try and avoid paying it, because if they have a sticker, the chances of someone stopping to check what is on that sticker are less than if there is no sticker at all. If they buy one and leave it in the window, they have a better chance of getting away with it.

Q 64

Julie Hilling: My other question is around the weight limit. One of the people who has given written evidence has said that this levy should actually be charged across cars and light vehicles. Do you think that 12 tonnes is the right weight to put this at, or should it be 7.5 tonnes, or another figure?

Tim Slater:  With 12 tonnes you catch the vast majority of the vehicles that will be coming across from the continent. I think it is a good place to start. Let’s see how the enforcement goes, let’s see how the compliance goes, and then maybe the weights can be reviewed in the future.

Phil Spittle:  I agree with that. As earlier witnesses said, it would not be economically viable in most instances for a small vehicle to come from overseas to this country to carry goods. So generally there would not be many of those vehicles on the road.

Q 65

Michael Connarty: On the question of fixed fines, it says there can be a fixed fine up to level 5:
“A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale.”
My understanding is that that could range quite a bit. For example, if someone comes in and does not pay the levy, and has all the information, and all the questions I was asking earlier about micro-knowledge are satisfied, they can be fined. What level of fine do you think people who are, in the words of the court, “dodging” should have? They can have a fixed fine at the lower end of £30 and at the higher end, up to £200. What do you think would dissuade people from just trying to dodge the levy for a quick journey into the UK and back?

Tim Slater:  On that range I would suggest the higher end. My colleague spoke earlier about the sorts of margins that we are making on loads, and certainly at £200 you would wipe out any profit on that particular trip. I think that would be a fairly significant incentive for people.

Steve Hanley-Cook:  Yes.

Phil Spittle:  I agree with that.

Q 66

Andrew Bridgen: I have been lobbied on this. Can the panel then think of any reason or problem with extending this Bill to cover foreign coaches as well, which also travel into our country?

Tim Slater:  Not anything immediate from myself.

Andrew Bridgen: No problem?

Steve Hanley-Cook:  No.

Phil Spittle:  No.

David Amess: Before I bring the Minister in, was there any other colleague who wanted to ask a question?

Q 67

Andrew Bingham: I originally thought that the disc idea was a good one, but having now heard it, I am not so sure. If we went with the disc idea then we would need discs of all different shapes and colours for all the different weights. Do you not think we could end up with a myriad of different coloured and shaped discs, making it less viable?

Steve Hanley-Cook:  This is indeed the case in other territories that have vignettes, and for their motorways they basically have a colour per year, the same as the road fund licence on your cars.

Q 68

Andrew Bingham: But you need the different weight levels of van.

Steve Hanley-Cook:  It would basically be on time. In the other countries it is actually ticked on the disc which weight category you are in, but it is a colour based on the time. So an annual disc it may be purple and a 6-month disc may be yellow. That is how they are doing it on other borders.

Q 69

Andrew Bingham: Then to properly police it, the weight dictates which disc and then whoever checks it will know what weight the wagon is.

Phil Spittle:  By the time you have looked it up, the vehicle will have gone.

Andrew Bingham: Exactly. I am beginning to take that view.

Phil Spittle:  You would end up with a code-book.

Q 70

Michael Connarty: I have just one final point. I know that you said earlier that you did not want to give the Government advice on how they should spend their taxes, but from the information that we have, both from the previous session and in the notes, it is anticipated that the scheme will raise £80 million over the period from 2013 to 2018, and that that money will go to the Consolidated Fund. That means it will go into the Chancellor’s back pocket and he can use it for whatever scheme he wishes. All of you said earlier that you think the money should go into roads and transport, but we have heard that only a small amount might go as an extra sum to VOSA. Would you like to elaborate on how you think that should be done? The Minister is here, and I am sure that he is listening.

Tim Slater:  I would echo what I said before: I do not think it is for us to tell the Treasury. Money being spent on roads, to make them safer and to reduce congestion, is always welcome, but whether that comes from this pot or other pots is a matter for you guys to discuss.

Q 71

Michael Connarty: What is the benefit for you then, if that is the case? Is it just that you want to get at the foreign drivers and foreign owners? That seems to be a very negative way of looking at it: levelling the playing field is not going to give you any advantage, it is simply going to burden those foreign owners. That is a strange way to look at life.

Phil Spittle:  It is a step towards a level playing field. It is a very small one, but nevertheless it is a step.

Michael Connarty: Is that all this is about? I had anticipated that it might have given you some benefits, apart from the simple feeling that you are getting back at the other guy.

Q 72

Stephen Hammond: Gentlemen, thank you for coming this morning and thank you for your evidence. I anticipate that you would say that some of the benefits of the scheme are that, first of all, it means a step towards a level playing field, and secondly, that it enables you to compete a little bit more effectively, both here and on the continent. Would that be correct?

Tim Slater:  It certainly does here. I do not think it helps us particularly on the continent. There are different measures on the continent that allow us to be competitive there.

Phil Spittle:  It helps us in this country.

Q 73

Stephen Hammond: To clarify one of Mr Connarty’s other points, on livestock and perishable goods: as you well know, VOSA has accepted practices to deal with those areas already, which have been in place for a long time. Nothing in this legislation changes or interferes with those practices. Are you clear that the practices that VOSA already has are capable of dealing with what will arise from the provisions in the Bill?

Tim Slater:  I am not overly familiar with those practices, personally.

Q 74

Stephen Hammond: You must be aware of what VOSA does in terms of its arrangements for livestock and perishable goods, if something is impounded now. Are those satisfactory?

Tim Slater:  I am not aware of them in any detail, and would not want to comment on them now. I do not know about colleagues.

Phil Spittle:  I have no experience of VOSA in concrete terms.

Steve Hanley-Cook:  We are not involved on those terms.

Tim Slater:  We try not to get our animals impounded by VOSA.

Q 75

Stephen Hammond: I am very grateful to hear that, and trust that the same will apply in future. Finally, to move on to the point about Ireland that Mr Slater raised a couple of times: the Irish Government have written to suggest that Northern Ireland be exempt from the charge. The only issue with that is that there are already road charges in southern Ireland. The new charge, such as it will apply in Northern Ireland, is about the same as existing Irish tolls if you do a round trip from Belfast to Dublin. The Department has suggested to the Irish Government that we have a bilateral conversation and agree on some roads, which cross the border, that might be potentially exempted from the charge. Would that be satisfactory for your purposes?

Tim Slater:  It would, yes. We would be very content with that.

David Amess: If there are no further questions from colleagues, that brings us to the end of our proceedings this morning. On behalf of the Committee, gentlemen, thank you very much indeed for coming in and giving evidence to us. You have enlightened the Committee, and we wish you a very happy Christmas.

Ordered, That further consideration be now adjourned.— (Nicky Morgan.)

Adjourned till this day at Two o’clock.